CHICAGO, IL, October 25, 2021 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released third quarter 2021 results of the NCREIF Timberland Index. The index returned 1.89% for the quarter, up from 1.70% last quarter and 0.04% in the third quarter of 2020. The EBITDDA return, at 0.91%, remained steady, up 12 basis points from the second quarter, while the appreciation return in the third quarter increased 7 basis points quarter-over-quarter, up to 0.98%. The 1.89% third quarter return represents the strongest single quarter return for the total index since the fourth quarter of 2015.
The Total Timberland Index had a 5.01% rolling one-year return, comprised of a 3.39% EBITDDA and 1.59% appreciation return.
Timberland Quarterly Total Return Trends by Region
Returns for the quarter were once again positive across each region. The Northwest region had the highest return of the third quarter at 4.26%, comprised of 1.35% EBITDDA and 2.92% appreciation returns. The South region returned 1.04% for the quarter, driven by steady EBITDDA returns (0.73%). The Northeast and Lake States regions returned, respectively, 1.65% and 1.94% for the quarter, buoyed by both strong EBITDDA returns of 1.25% and 0.87% as well as positive appreciation returns of 0.40% and 1.06%. Third quarter results reflect the continued recovery of log markets across the U.S., as prices in some areas reached marks not seen since before the 2007-2009 recession.
Timberland Market Value per Acre in USD by Region
Timberland market value per acre was $1,732 for the third quarter, down -0.80% from its previous quarter mark. The South, Northwest, and Lake States regions ended the quarter with market values per acre of $1,797, $2,609, and $606, respectively, representing modest increases of 0.25%, 0.19%, and 0.73% from second quarter values. The Northeast region, meanwhile, saw a decline in market value per acre, with a third quarter result of $1,160 per acre, down 6.49% from the second quarter. This was due largely to property sales and additions within the region’s index.
The NCREIF Timberland Index consists of 450 investment-grade timber properties with a market value of $22.3 billion. This includes 310 properties in the South, 82 in the Northwest, 39 in the Northeast, and 17 in the Lake States. This data enhances the ability of institutional investors to evaluate the risk and performance of timberland investments across the United States.